Rubber Skill Development Council

Transcription

1 2013 Rubber Skill Development Council Skill Gap Analysis across Sub-Segments (Tyre and Non-tyre) for Rubber Industry Introduction about Global and Indian Rubber Industry ICRA Management Consulting Services Limited

2 Contents 1. Introduction Study Background Overview of RSDC Scope of Work Terms of Reference 5 2. Overview of Rubber Manufacturing Industry Global Rubber Industry Global Rubber Production Key Trends in Producing Countries Global Rubber Consumption Global Synthetic Rubber Production and Consumption Overview of Indian Rubber Industry Rubber Production in India Rubber Consumption in India Product-wise consumption of rubber Key Trends in Product Groups Institutional Support 28 2

3 Disclaimer: Rubber Skill Development Council ( RSDC ) engaged ICRA Management Consulting Services Limited (IMaCS) to prepare this report and the same has been prepared by IMaCS in consultation with RSDC. All rights reserved. All copyright in this report and related works is solely and exclusively owned by RSDC. The same may not be reproduced, wholly or in part in any material form (including photocopying or storing it in any medium by electronic means and whether or not transiently or incidentally to some other use of this report), modified or in any manner communicated to any third party except with the written approval of RSDC and with reference attributed to IMaCS. This report is for information purposes only. While due care has been taken during the compilation of this report to ensure that the information is accurate to the best of RSDC s and IMaCS s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. RSDC and IMaCS neither recommend nor endorse any specific products or services that may have been mentioned in this report and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this report. Neither RSDC nor IMaCS shall be liable for any direct or indirect damages that may arise due to any act or omission on the part of the user due to any reliance placed or guidance taken from any portion of this report. 3

4 1. Introduction 1.1. Study Background India is the 4 th largest producer and 2 nd largest consumer of natural rubber in the world. The rubber industry comprise of tyre and non-tyre industries with a turnover of Rs.63,000 crore in with a CAGR of 10% for last 3 years. The Indian rubber industry consists of around 5,500 units 1 and is dotted with the presence of several small and tiny units. To ensure availability of skilled human resources to rubber industry, the Rubber Skill Development Council (RSDC) has been formed as a focused national level skill promoting entity under the aegis of National Skill Development Corporation (NSDC) 1.2. Overview of RSDC RSDC is a Section 25 company formed under the PPP model, promoted by All India Rubber Industries Association (AIRIA) and Automobile Tyre Manufacturers Association (ATMA), under the aegis of National Skill Development Corporation (NSDC). The objectives of RSDC encompasses:- Standardization of job roles / skill types through development of National Occupation Standards (NOS) Identification of critical job roles where major skill gap exists Develop standards and assessment tools Capacity building of the Rubber education and training system Build affiliation and accreditation process for trainees Certification and examination of trainees Enable maximum employment of RSDC certified personnel Establish well structured, sector specific labour market information system (LMIS) Given this background, ICRA Management Consulting Services Limited (IMaCS) has been appointed by Rubber Skill Development Council (RSDC) to conduct a study on Skill Gap Analysis across the Sub- 1 Source: Rubber board, Stakeholder discussions, IMaCS Analysis 4

5 segments (Tyre and Non-tyre) 2 for Selected States namely Maharashtra, Kerala, Tamil Nadu, and Punjab for Rubber Industry Scope of Work To conduct skill gap analysis across sub-segments (tyre and non-tyre) in the Rubber industry, for selected states namely Maharashtra, Tamil Nadu, Kerala, and Punjab 1.4. Terms of Reference i. Consolidation of list of companies in the states of Maharashtra, Kerala, Tamil Nadu and Punjab with regard to tyre and non-tyre including specific sub-sectors: To analyse the entire sector and its characteristics in terms of available sub sectors, contribution to the industry, demand and supply factors in terms of employment. Manpower availability in the sector: Skills available Vs. Skills required The number of resources existing vs. required across all job roles in the company across the selected states sub sector wise. Identifying gaps with regard to present quality of manpower across all job roles in the companies across the selected states. Demographic trends of employment employment concentration city wise across the states. To understand the sub-sector wise current employment records both direct and indirect jobs. To understand the interdependency and level of commonness in sub sectors profiles and availability of cross functional workforce requirement in sub sectors. ii. Training capacity available in the selected states Number of students being trained by the available institutes and infrastructure available with them. Gap analysis with respect to quality of manpower being trained and skills required by the industry. iii. Recommendations 2 Details of Product Group is given in Annexure 1 5

6 Forecasting for the next 5 years with respect to manpower requirement for the sector in the specific states. Gap in skills - required vs. available (qualitative vs. quantitative). Changes required for training students as per the industry expectations with respect to infrastructure and training methodology. Need for developing or upgrading available training infrastructure in the selected states. Need for changing the training methodology (keeping in mind the gap in the skills available vs. skills required across the sub-sectors in the selected states). iv. Validation through key stakeholders and documentation of Skill Gaps Analysis v. Final report on Skill Gaps current and future and recommendations for bridging the gaps and sustainability plan to maintain the same 6

7 2. Overview of Rubber Manufacturing Industry 2.1. Global Rubber Industry Global Rubber Production Rubber has been used across the world from time immemorial. From humble beginnings of use as an eraser (suggested by noted explorer Magellan), today rubber is used across various industries like auto, aviation, healthcare, etc which drive the economy. With origins in Brazil, today rubber in its natural and synthetic forms is used globally. The rubber industry across the globe has majority of its production concentrated in the Asian continent, particularly in Thailand, Malaysia, India and China. The table below showcases the global Natural Rubber (NR) production. Thailand is the top natural rubber producing country. The critical reason attributed to Thailand s dynamic performance in rubber is the enhanced R&D efforts to improve the plantation level productivity. Table 1: World natural rubber production ( 000 tonnes) Growth ( per cent) F F Thailand 3,090 3,164 3,252 3,394 3, Indonesia 2,751 2,440 2,736 2,982 3, Malaysia , India Vietnam China Côte d'ivoire

8 ( 000 tonnes) Growth ( per cent) F F Brazil Others World 10,128 9,690 10,399 10,974 11, Source: IMaCS Analysis Figure 1: World Rubber Production by countries (as proportion of 2012) Côte d'ivoire, Brazil, 1% Others, 8% 2% China, 6% Vietnam, 7% India, 8% Thailand, 31% Indonesia, 27% Malaysia, 9% Source: IMaCS Analysis The production chart depicted shows Thailand and Indonesia together contributing about 58 per cent to the global production, as of The hospitable climate and the focus on improving the plantation productivity have lead to these results. The next section captures the trends witnessed in the main rubber producing nations Key Trends in Producing Countries The main impetus behind global NR production growth in recent years has come from Indonesia. Indonesia's NR production grew by 9 per cent in 2011, compared with growth of 12.1 per cent in

9 The high growth was despite unseasonable rains during 2011 disrupting production. Adverse weather is continuing to have an impact in 2012, with the Rubber Association of Indonesia stating that overall production was affected by heavy rainfall in the key rubber-producing areas of Sumatra and Kalimantan. Thus, Indonesia s NR production growth slowed down in There is some division in expectations on Indonesia's 2013 production, with the Ministry of Agriculture anticipating a decline (the first since 2009), while Gapkindo anticipates a 7 per cent increase. The government will carry out a 10,685-ha replanting programme in 2013, which will slow production, and ask farmers to reduce tapping in an attempt to support prices. Gapkindo has highlighted the relatively weak productivity of Indonesia' rubber plantations compared with regional peers and is calling on investment from the government, including by providing seeds at affordable prices. In case of Thailand, the world's largest producer of NR, was hit by severe flooding in late 2011, but rubber plantations are concentrated in the south of the country, away from the flooding in the northern and central provinces. Thus, NR production grew by 3.5 per cent for However, according to the Department of Disaster Prevention and Mitigation, the southern regions experienced heavy rain in January 2012, which hampered NR production during Thailand's position as the world's largest producer of NR will remain unchallenged in India Natural Rubber Production Scenario In India, the yielding area in India was expected to expand during Around 24,300 hectares of trees were planted during 2005 and a small portion of 29,900 hectares of trees were planted in These will come under tapping during However 15,000 hectares under rubber trees will be uprooted for replanting. Apart from this, a small extent of yielding trees in the traditional region is expected to be discarded for other land-uses. The production from low-yielding non-traditional areas would also be looking up. Production of NR in India grew by just 2 per cent in Heavy rains in the country's main rubber-producing areas disrupted production, as did farmers' concerns over low prices. India's production peaks in the final months of the calendar year, and in December 2012 production was up by nearly 18 per cent month on month. Medium-term prospects for Indian rubber production are promising, partly because the government is committed to expanding the country's rubber-producing capacity. By the end of the 12th Five Year Plan in March 2017, it hopes to bring an additional 60,000 ha under cultivation. 9

10 With the analysis on the global natural rubber production and trends, the report will next focus on the consumption trends Global Rubber Consumption The global consumption trends have shown a 3.1 per cent growth from While China has the production of about 6 per cent of the global production for 2012, the consumption pattern reveals that it accounts for about 33 per cent of the consumption for increased from 881,000 tonnes in 2008 to 995,000 tonnes in India s consumption of rubber has Table 2: World Natural Rubber Consumption Countries Consumption in 000 tonnes Growth ( per cent) F F China 2,947 3,384 3,646 3,603 3, India Japan Other Asia 2,126 2,061 2,292 2,298 2, EU 1, ,132 1,215 1, Other Europe North America 1, ,071 1,165 1, Latin America Africa World 10,171 9,330 10,778 10,924 11, % Source: The Rubber Study Group, IMaCS Analysis 10

11 Global Synthetic Rubber Production and Consumption The drop in natural rubber production in Brazil during the World War times triggered the need for lowercost products also with steady supplies to manufacture many products, especially tyres. The pressure imposed by the conquest of the plantations of Asia by the Japanese prompted the development of a rubber that was able to meet the extraordinarily high demands of the troops at that time, although its structure differed somewhat from its natural counterpart. Thus, the synthetic rubbers (SR) with styrene and butadiene polymers were manufactured. SR is superior to NR primarily in two properties its heat and mineral oil resistance. The 1950s and 1960s saw a period of intense market competition between NR and SR. Within 20 years, improved types of SR began to dominate industrial consumption, holding almost 71% of the market by Around 65 per cent of world SR production is used in automotive tyres, followed by automotive mechanical goods (10 per cent), non-automotive mechanical goods (10 per cent), and footwear (5 per cent). In India, the automotive tyre industry accounts for around 69 per cent of SR consumption, followed by footwear (10.9 per cent), and cycle tyres (6.1 per cent). The SR production shows that the North America and Other Europe are growing over the global growth rate of 7 per cent. This concentration in production of SR is mainly due to the high industrial uses that this is put to in the countries in North America, especially the USA. Table 3: World synthetic rubber production (in 000 tonnes) Region Growth % North America 2,069 2,458 2,647 9% Latin America % EU ,183 2,481 2,612 6% Other Europe 1,143 1,403 1,472 9% Africa % Asia 6,363 7,065 7,637 6% 11

12 Region Growth % World 12,385 14,082 15,104 7% Source: The Rubber Study Group, IMaCS Analysis The consumption data profiled for the world regions pegs the global growth at 7 per cent. The European zone and the North America zones are growing above the world growth rate. This also gives glimpse into the rationale that the most of SR that is produced in the top zones like North America and European zone are put to the captive industrial use. Table 4: World synthetic rubber consumption ( 000 tonnes) Region Growth % North America % Latin America % EU % Other Europe % Africa % Asia % World % Source: The Rubber Study Group, IMaCS Analysis 2.2. Overview of Indian Rubber Industry The Indian rubber industry is one of the key sectors of the economy and a sector that has been in existence from the early days. Though in the initial days, the sector was more attuned to catering to the inward needs to the country, the sector has now evolved to become a manufacturing major. Some of the key factors that highlight the criticality of this sector in the Indian economy are: 12

13 The area under rubber plantations in India is ranked sixth globally India ranks fourth in the world natural rubber production India is ranked second in the consumption of natural rubber, behind China India is the top ranked nation globally in terms of productivity The Indian rubber industry consists of around 5,500 units 3 and is dotted with the presence of several small and tiny units. Tyre industry constitutes around 60 per cent of Indian rubber industry turnover Rubber Production in India Rubber is traditionally grown in India in the hinterlands of the South West Coast comprising of the state of Kerala and adjoining Kanyakumari District of Tamil Nadu (TN). Kerala is the single largest rubber producing state in India accounting for 91 per cent of total NR production. Kerala and TN are considered to be the traditional rubber growing regions in the country. In recent years, among non-traditional region, Tripura and Assam have witnessed growing production of NR. In Kerala and TN, the tract is now reaching a level of saturation for rubber cultivation and the scope of further expansion of the crop is very much limited. Considering this fact, the expansion of rubber cultivation, which is of prime importance for setting up rubber production, has to take place mainly in non-traditional areas. Non-traditional areas so far identified as almost fully or marginally suitable for rubber cultivation are Arunachal Pradesh, Assam, Manipur, and lower reaches of hills of Meghalaya, Mizoram, Nagaland and Tripura excluding the other state of India. Although the North Eastern Region lies far outside the traditional rubber growing zone, the agro-climatic conditions obtained here are unique in as much as near tropical features are experienced in most parts owing to low elevations, exposure to monsoons and other moderating influences. The positive results obtained from trial plantations undertaken in early 1960s in the then undivided Assam and Tripura, commercial scale plantations were raised by Government Forest and Soil Conservation Departments. Public Sector Corporations set up later joined rubber planting endeavours on extensive scales. Thus while in Assam and Tripura, Public Sector Corporations are leading in the rubber plantation sector, in Meghalaya, Manipur, Mizoram and Arunachal Pradesh the role has played by the State Forest and Soil 3 Source: Rubber board, Stakeholder discussions, IMaCS Analysis 13

14 Conservation Departments. Individual growers are also contributing to fast growth of rubber cultivation in this region. Rubber has been identified as one of the thrust areas in Tripura, in view of its suitability to the terrain and the acceptability amongst the people. Studies have shown that about 100,000 hectares of area in the state can be brought under rubber plantation. The area under rubber cultivation at present has increased from 27,000 ha in FY2001 to 50,070 ha in , which is the second largest, after Kerala. Including Assam and other states, acreage in the North East has increased from 46,885 ha in to 88,865 ha in The yield per hectare and the quality of rubber are also comparable to Kerala's plantations. In fact, Tripura is now considered the "Second Rubber Capital of India" by the Rubber Board. The below table showcases the total rubber production in India across natural, synthetic and reclaim rubber. The NR has grown at a rate of 3 per cent, while SR and RR have grown at a rate of 4 per cent and 5 percent respectively. Table 5: Rubber production in India ( 000 tonnes) Year Natural Synthetic Reclaim Total ,400 69,653 63, , ,435 80,401 67, , ,650 88,366 70, , ,665 94,209 73, , ,625 97,634 76, , ,895 99,513 78,495 1,030, , ,265 83,075 1,009, ,500 96,739 86,390 1,047, , ,743 93,535 1,031, , ,340 99,960 1,072,250 14

15 Year Natural Synthetic Reclaim Total * 903, , ,565 1,117,864 CAGR 3% 4% 5% 4% Source: Rubber4u.com Figure 2: Percentage contribution of rubber production * % 80% 81% 83% 82% 83% 82% 82% 82% 81% 83% 10% 10% 10% 9% 10% 10% 10% 10% 10% 10% 9% 9% 9% 9% 8% 8% 8% 8% 8% 8% 8% 8% Natural Synthetic Reclaim Source: IMaCS Analysis The state-wise area in hectares under rubber shows the domination of Kerala to the national tally. The rise in the hectare area under Tripura justifies the sobriquet of second rubber capital of India. 15

16 Table 6: State-wise rubber plantation in India (in ha) State Andaman and Nicobar NA Andhra Pradesh ,103 NA NA Arunachal Pradesh ,200 NA NA Assam 12,806 13,208 13,841 14,057 14,848 15,890 18,225 23,705 28,102 32,659 38,090 Bihar Delhi Goa ,010 1,017 1,081 1,125 Gujarat Haryana Karnataka 20,017 20,294 20,460 21,189 23,153 26,035 28,830 32,415 34,777 38,110 41,588 Kerala 475, , , , , , , , , , ,565 Madhya Pradesh Maharashtra ,173 1,513 Manipur 1,698 1,708 1,773 1,786 1,829 1,859 1,914 2,380 2,723 NA NA Meghalaya 4,354 4,586 4,758 4,834 5,060 5,331 6,830 7,740 9,196 10,584 11,875 Mizoram NA NA Nagaland 2,024 2,087 2,091 2,184 2,274 2,486 2,697 3,515 4,141 NA NA 16

17 State Orissa NA NA Pondicherry Punjab Rajasthan Tamil Nadu 18,704 18,631 18,633 18,642 18,815 19,233 19,410 19,355 19,545 19,767 19,790 Tripura 27,947 28,853 30,770 32,065 34,189 37,846 41,165 50,070 55,415 59,285 64,480 Uttar Pradesh West Bengal NA NA Others ,794 16,754 Total 566, , , , , , , , , , ,780 Source: Rubber4u.com 17

18 2.4. Rubber Consumption in India The consumption pattern evinced by table 7 again shows the steady dominance of the consumption of natural rubber. The analysis of the 2012 consumption pattern reveals that about 65 per cent of the consumption of rubber across various industries is through natural rubber. Table 7: Rubber consumption pattern in India (in 000 tonnes) Year Natural Synthetic Reclaim Total , ,530 63, , , ,850 67, , , ,190 70,460 1,000, , ,650 72,905 1,052, , ,495 76,535 1,115, , ,830 78,435 1,169, , ,155 83,165 1,241, , ,950 86,030 1,250, , ,710 92,250 1,370, , , ,290 1,459, * 964, , ,435 1,490,200 Source: Rubber4u.com 18

19 Figure 3: Rubber consumption pattern in India (2012) 7% 28% 65% NATURAL SYNTHETIC RECLAIM Source: Rubber 4u.com Further to the broad usage pattern, the rubber consumption across the principal tyre and non-tyre segments show that about 66 per cent as of is consumed by the tyre segment. This is illustrated by table 8. Table 8: Broad sector-wise total rubber consumption In tonnes * Tyre 606, , , , , , ,953 Non-Tyre 508, , , , , , ,247 TOTAL 1,115,140 1,169,570 1,241,775 1,250,700 1,370,525 1,459,835 1,490,200 % tyre 54 % 56 % 57 % 58 % 62 % 64 % 66 % % non-tyre 46 % 44 % 43 % 42 % 38 % 36 % 34 % Source: Rubber 4u.com Further drill down of the broad sectoral consumption into NR, SR and RR the dominance of natural rubber usage can be analyzed. This is the trend that is expected to change in the coming years with the increased usage of synthetic rubber in the manufacturing in India with rising rubber prices. Table 9: Sector-wise rubber consumption in India Year NATURAL RUBBER SYNTHETIC RECLAIM RUBBER TOTAL TOTAL 19

20 RUBBER RUBBER In Tonnes Tyre Non-Tyre Tyre Non- Tyre Tyre Non-Tyre Tyre Non-Tyre , ,785 95,277 79,253 12, , , , , , , , ,367 16, , , , , , , , ,759 18, , , ,465 1,000, , , , ,383 19, , , ,559 1,052, , , , ,915 21, , , ,661 1,115, , , , , , , , ,966 1,169, , , , , , , , ,871 1,241, , , , , , , , ,294 1,250, , , , , , , , ,194 1,370, , , , , , , , ,287 1,459, , , , , , , , ,247 1,490,20 0 Source: Rubber 4u.com 20

21 2.5. Product-wise consumption of rubber This section will outline the product-wise consumption pattern of rubber natural, synthetic and reclaimed. The split-up will be explored across the following dimensions: Consumption of natural rubber across product segments Consumption of synthetic rubber across product segments Consumption of reclaimed rubber across product segments The split-up of the total rubber usage across the various product segments shows the domination of the auto and cycle tyre manufacture, which has primarily been driving the rubber sector growth, has grown at nine per cent over the last decade. 21

22 Table 10: Rubber consumption usage across product segments (in tonnes) Segments Growth % Auto 385, , , , , , , , , ,190 9% Cycle 119, , , , , , , , , ,880 2% Camelback 51,565 54,051 54,443 56,201 58,163 58,721 59,059 62,601 66,150 65,495 2% Footwears 113, , , , , , , , , ,345 0% Belts and hoses 52,677 53,622 55,149 56,683 57,991 60,765 65,378 67,278 67,845 67,840 3% Latex 32,536 33,603 33,452 32,973 34,466 36,410 38,522 38,445 39,465 37,765 2% Dipped goods 32,381 34,234 34,441 33,899 34,947 36,495 38,417 38,720 40,310 38,925 2% Cables and wires 4,243 4,298 4,251 4,548 4,384 4,651 4,768 4, % Battery boxes 14,266 14,669 14,404 14,764 14,733 15,068 15,232 14, % Others 70,653 78,970 82,795 87,694 93,010 84,659 84,231 81,027 76,470 84,395 2% Total 876, ,595 1,000,250 1,052,960 1,115,140 1,169,570 1,241,775 1,250,700 1,370,525 1,459,835 5% Source: Rubber 4u.com 22

23 Natural rubber consumption pattern reveals the decreasing usage of NR across several product segments like battery boxes, cables and wires and footwear which have branched out to synthetic rubber. Table 11: Natural rubber consumption usage across product segments (in tonnes) Segments Growth % Auto tyres 379, , , , , , ,760 7% Cycle tyres 88,827 91,700 92,587 97,680 96,282 89,085 87, % Camelback 40,739 42,227 40,514 41,057 46,953 45,140 43,680 1% Footwear 74,736 67,471 65,617 69,817 68,325 66,355 62,480-3% Belts and hoses 41,443 41,956 43,136 46,045 48,863 46,170 43,570 1% Latex 32,973 34,466 36,410 38,522 38,445 39,465 37,765 2% Dipped goods 33,899 34,947 36,495 38,417 38,720 40,130 38,925 2% Cables and wires 1,830 1,453 1,589 1,640 1, % Battery boxes 1,828 1,801 1,750 1,731 1, % Others 59,870 62,581 57,279 55,927 48,342 42,430 44,485-4% Total 755, , , , , , ,715 3% Source: Rubber 4u.com A similar analysis of synthetic rubber consumption reveals a steady growth across all major segments. The auto tyre segment, as expected, has clocked the maximum growth rate of about 13 per cent. Table 12: Synthetic rubber consumption usage across product segments (in tonnes) Segments Growth % Auto tyres 124, , , , , , ,540 13% 23

24 Segments Growth % Cycle tyres 17,341 18,153 21,588 20,942 20,845 24,965 25,190 5% Camelback 11,138 11,494 13,370 13,320 11,150 15,625 15,700 5% Footwears 38,042 37,689 40,760 45,383 45,950 46,160 44,910 2% Belts and hoses 10,497 10,747 12,095 13,005 11,455 13,735 16,720 7% Latex NA Dipped goods NA Cables and wires 1,842 1,971 2,074 2,188 1,984 1% Battery boxes 2,738 2,709 2,855 2,949 2, % Others 18,906 20,489 18,872 19,748 22,938 19,050 23,770 3% Total 224, , , , , , ,830 9% Source: Rubber 4u.com The reclaimed rubber usage pattern shows a growth across most segments except that of battery boxes. Table 13: Reclaimed rubber consumption usage across product segments Products Growth % Auto tyres % Cycle tyres % Camelback % Footwear % Belts and hoses % Latex NA 24

25 Dipped goods NA Cables and wires % Battery boxes % Others % Total % Source: Rubber 4u.com 2.6. Key Trends in Product Groups This section will analyze the critical factors that have lead to the consumption pattern of the NR, SR and RR across the principal product groups. Table 14: Consumption trends across product groups Product Natural Rubber Growth Trend Synthetic Rubber Growth Trend Reclaimed Rubber Growth Trend Auto Tyres 7% 13% 12% Cycle tyres (0.3%) 5% 4% Camelback 1% 5% 5% Footwear (3)% 2% 3% Belts and hoses 1% 7% 7% Latex 2% NA NA Dipped goods 2% NA NA Cables and wires (3)% 1% 2% Battery boxes (2)% 1% (1)% 1. Auto and Cycle tyre segment With an estimated production of 125 million tyres during FY2013, the size of the Indian tyre industry is estimated at Rs billion. The auto industry consists of around 39 companies, spread throughout the country, with many being rather small. 25

26 There are around 60 tyre factories across India (of which 9 factories are presently closed). The total contribution of excise and customs duty is estimated at around 0.1% of India s gross domestic product (GDP). Tyre companies directly employ over 0.13 million persons of varying skill levels. Tyre industry consumes around 63% of the total Natural Rubber (NR) produced in the country. Since production of NR involves over 1 million growers (farmers), tyre industry provides gainful employment to nearly 0.5 million growers of NR, a majority of them in the small grower category. In addition, if related services like tyre retreading, repairing, air filling etc. are taken into account, employment potential increases manifold. The increase in consumption across all the three rubber types hint at the direct link the tyre segment has with India s automobile sector growth story. The cycle tyre segment shows a reduced share of NR primarily because of higher increase in NR prices and changes in product mix. Three segments commercial vehicles or CVs (trucks and bus), four wheelers (4Ws), and two wheelers (2Ws) account for around 95% of India s total tyre production. Original equipment manufacturers (OEMs) or automotive manufactures account for around 44% of total demand for domestic tyre industry. Thus, automotive production growth has a direct impact on growth of tyre production. In addition, demand in the replacement market has a significant impact on tyre production. Table 15 highlights the increase in the tyre production in India which has resulted in growth rate in consumption of NR, SR and RR. Table 15: Tyre production by end product Thousand Units FY (9M) Growth (9M) Truck & Bus 12,839 15,283 15,668 16,085 12, % 6.3% Passenger Car 16,570 20,047 26,201 27,141 23, % 11.7% Jeep/MUV 1,469 1,402 1,500 1,595 1, % N/A LCV 5,298 5,739 6,029 6,688 4, % -11.0% 2W/3W Tyres 41,031 49,222 63,258 67,051 44, % -12.8% Scooter (incl. Moped) 6,409 8,121 12,652 13,586 7, % -24.2% Three wheelers 4,474 5,437 7,488 8,608 4, % -31.2% Motorcycle 30,148 35,664 43,118 44,857 32, % -5.8% Tractor Tyre 3,915 4,923 5,423 5,667 4, % -0.5% Animal Driven Vehicles % N/A 26

27 Thousand Units Growth Industrial % 3.3% Off-The-Road % 56.3% Total 82,107 97, , ,397 92, % -2.1% De-coding the tyre growth Source: IMaCS Analysis India s tyre production is estimated to have increased 1% in FY2013 primarily because of replacement demand for CVs. India s tyre production increased 5.2% during FY2012 to million compared with growth of 22.1% in FY2011, and 18.9% during FY2010. During FY2010, India s tyre production increased at a high rate from around mid-2009, mainly because of recovery in India s automotive production. Production growth was primarily driven by higher increases in four wheelers (4W) and two wheelers (2W) production, and recent recovery in CV production. During FY2011, production growth was primarily driven by higher increases in 4W and two wheelers (2W) production. However, CV production growth slowed down primarily because of supply disruptions and higher imports. 2. Camelback Camel back finds extensive use in the arena of treading. This is why with the rise in the use of tread materials and uses, there has been a steady increase in the usage of NR, SR and RR. With the increasing awareness in India about the advantages of tread rubber products especially in the arena of re-treading, the usage of rubber across the camel back product segment is poised to grow. 3. Footwear The footwear segment s fortune is tied to the global economic trends. The global recession caused output volumes and consumer spending across a wide range of products, including footwear, to weaken in Spending was moderate in 2012, as industry revenue for the Global Footwear Manufacturing industry increases by 2.2 per cent. Though the usage of NR for footwear manufacturing has steadily come down at about 3 per cent, the SR and RR use are expected to rise with the changing lifestyle and broadening usage of footwear in industrial domains. 4. Belts and Hoses Hoses and belts are extensively used for the industrial purposes. Hoses are made from one or a combination of many different materials. Hoses and belts use a NR as well as SR. The consumption trends show a steady growth across all three forms of rubber. The future of this industry will continue to depend on downstream demand from manufacturing industries, since belts and hoses are used in the manufacturing process. Because cars require these parts as key inputs, the automotive industries play a 27

28 major role in driving demand. In fact, the steady rise in consumption is due to the extensive application they find in the auto sector, which has driven their numbers. 5. Latex and Dipped Goods Latex based products and dipped goods (which use latex in some form like cenex, etc) have seen growth of about 2 per cent in the consumption of the NR. Of course, the RR and SR are not applicable for either segment. With increasing use of several dipped goods products like gloves, condoms, finger stalls, etc in both household levels as well as in industrial scenario, the consumption of NR in 2001 at about 33,000 tonnes has risen to about 38,000 tonnes. Also, for latex based products like foam, threads, etc the environmental factor and change in the lifestyle has lead to the rise in demand. The industry expects higher consumption of latex for these two segments. Of course, the one factor that could lead to the change in pattern is the rising price of the natural rubber. 6. Cable wires The analysis of the cable wire trends clearly shows the preference of the industry shifting towards the SR and RR. This is mainly due to the advantage of SR of offering higher temperature and mineral resistance. The primary usage of cables and wires are in building and industrial zones. So, a deeper analysis of the SR consumption trends reveals a dip in 2009, correlating with the global recession. Going forward however, SR and RR consumption is poised to be healthy with the economic recovery and the bloom of several emerging economies Institutional Support The institutional support for the rubber sector is driven by following organizations: Ministry of Commerce The Rubber Board All India Rubber Industries Association Automotive Tyre Manufacturers Association Rubber Skill Development Council Indian Rubber Institute 28

29 The Ministry of Commerce 4 The mandate of the Department of Commerce is regulation, development and promotion of India s international trade and commerce through formulation of appropriate international trade & commercial policy and implementation of the various provisions thereof. The basic role of the Department is to facilitate the creation of an enabling environment and infrastructure for accelerated growth of international trade. The Department formulates implements and monitors the Foreign Trade Policy (FTP) which provides the basic framework of policy and strategy to be followed for promoting exports and trade. The Trade Policy is periodically reviewed to incorporate changes necessary to take care of emerging economic scenarios both in the domestic and international economy. Besides, the Department is also entrusted with responsibilities relating to multilateral and bilateral commercial relations, Special Economic Zones, state trading, export promotion and trade facilitation, and development and regulation of certain export oriented industries and commodities. The Rubber Board is organized under the Ministry of Commerce. The Rubber Board 5 The Rubber Board is a statutory body constituted by the Government of India, under the Rubber Act 1947, for the overall development of the rubber industry in the country. The importance of rubber production in India from strategic and security reasons had been realized by the government during the Second World War period. The rubber growers in India were encouraged to produce the maximum rubber required for the use during war. After the war, there were growing demands from the growers for setting up a permanent organisation to look after the interests of the industry. Thereupon the government set up an ad-hoc committee in 1945 to study the situation and to make appropriate recommendation. On the recommendation of this ad-hoc committee, the government passed the Rubber (Production and Marketing) Act, 1947, on 18th April 1947, and the Indian Rubber Board was constituted forthwith. The Rubber Production and Marketing (Amendment) Act, 1954, amended the name of the Board as The Rubber Board. 4 Source: The Ministry of Commerce 5 Source: The Rubber Board 29

30 All India Rubber Industries Association (AIRIA) 6 The All India Rubber Industries Association (AIRIA) is a not for profit making body serving the rubber industry and trade with the objectives of safeguarding and promoting interests of the industry. The aims and objects for which AIRIA stands, inter-alia, include: To promote and protect the interest, growth and development of the rubber industry. To foster Co-operation among individuals and units engaged in the manufacture of rubber goods with a view to advancing and safeguarding the interest of the industry. To provide common forum for exchange of views amongst the members. To arrange conferences, exhibitions, trade delegations, factory visits, techno-commercial talks and allied activities. To investigate, collect and circulate information and statistics relating to the industry. To represent officially to Government the views of the industry on all matters affecting or likely to affect the industry. To help the members in solving the difficulties faced in procuring raw materials. To support or oppose legislative or other measures likely to affect the industry. To disseminate information through the official organ, periodicals, circulars, etc. Automotive Tyre Manufacturers Association (ATMA) 7 Automotive Tyre Manufacturers Association (ATMA) was set up in 1975, registered under The Companies Act, as the representative body of automotive tyre industry in India. 8 large tyre companies representing over 90% of production of tyres in the country are members of the Association. The Association with the guidance of the Managing Committee functions through various committees set up, consisting of different disciplines, such as, Marketing, Export, Purchase (Raw Material), Taxation, Technical etc. Day to day functioning of the Association is managed by the Secretariat of the Association headed by the Director General. 6 Source: All India Rubber Industries Association (AIRIA) 7 Source: Automotive Tyre Manufacturing Association 30

31 Rubber Skill Development Council (RSDC) 8 RSDC has been constituted under the aegis of National Skill Development Corporation (NSDC), in collaboration with All India Rubber Industries Association (AIRIA) and Automotive Tyre Manufacturers Association (ATMA), with the aim to identify and fulfill skill development needs in the Rubber sector. The RSDC will encourage the industry to employ skilled and certified manpower. It will create a dynamic LMIS to keep track of the labour market skill gaps, frame Occupational Standards, facilitate development of practical and high quality training content, ensure adequate availability of faculty through Train The Trainer initiatives, build accreditation and certification mechanisms and encourage capacity building through private sector participation. In the process, RSDC will indulge in preparing a catalogue of skill sets, range and depth of skills to facilitate individuals to choose from. RSDC has been registered as a Section 25 company. The purpose of RSDC is to ensure the generation of skilled manpower in both the tyre and the non-tyre sectors, provide employment opportunities to youth across the nation, create career paths in roles existing within the unorganized and organized segments of the rubber industry and ensure active participation of the industry in absorption of skilled manpower generated through RSDC. Vision: RSDC is the rubber sector s skill development and standard setting body. RSDC proposes the broad activities:- Standardization of job roles / skill types through development of National Occupational Standards (NOS). Identification of critical job roles where major skill gaps exist Develop Standards and Assessment Tools Capacity building of the Rubber education and training system Plan and execute Training of Trainers Maximum participation of private training institutes Build affiliation and accreditation process for institutes Certification and examination of trainees 8 Source: Rubber Skill Development Council 31

32 Enable maximum employment of RSDC certified personnel Establish well structured, sector specific Labor Market Information System (LMIS) Mission: As an overview, RSDC aims to address the following:- Setting up Labour Market Information System (LMIS) to assist planning and delivery of training Identification of skill development needs and preparing a catalogue of skill types Develop a skill development plan and maintain skill inventory Developing skill competency standards Standardization of affiliation and accreditation process Capacity creation in skill development Plan and execute training of trainers Promotion of academies of excellence Indian Rubber Institute (IRI) 9 Indian Rubber Institute (IRI), is a professional body of rubber technologists, engineers, scientists, academicians and other professionals and organizations associated with the rubber and allied industry in India. A non-profit organization of 63 years standing, IRI was constituted as a national body and got registered on 25th May 1987 under the West Bengal Societies Act XXVI of 1961 no. S/55295 of and has since been continuing its educational and training activities. With headquarters at Kolkata, IRI has been functioning from seven branches at Chennai, Delhi, Karnataka, Kerala, Kolkata, Mumbai, and Rajasthan. The key goals of the IRI are: Provide Technical training and education to members and their supporting organisation through workshop, seminars & conferences Award Certificate, Diploma (DIRI / PGD-IRI) to its members through different examinations. Develop and publish technical information that contributes to professional growth of members. Participate & network with individuals and other professional organisation in Asia Pacific Region for sharing knowledge on Rubber Science & Technology Build bridges and create trust amongst different stakeholders 9 Source: Indian Rubber Institute 32